Reuters News Service 1 October 2020
More than 7,500 finance jobs and a trillion pounds in assets have already left Britain for the European Union as banks prepare for full-blown hard Brexit in January, EY consultants said on Thursday.
Banks, insurers and asset managers have opened new or expanded existing hubs in the EU to continue serving their clients given that future access will be more limited once transition arrangements expire on Dec. 31.
The number of jobs and amount of assets is still a fraction of total jobs and assets held by Britain’s financial sector.
But there could still be a flurry of further staff and operational announcements in the weeks before the year end, said Omar Ali, UK financial services managing partner at EY.
“Firms must now ensure that as a minimum they will be operational and can serve clients on the 1st of January 2021,” Ali said.
EY said its Brexit Tracker showed that companies have also been hiring for more than 2,800 new roles in Europe since Britain voted for Brexit, meaning to leave the EU in 2016
Assets worth over 1.2 trillion pounds ($1.55 trillion) belonging to EU customers have also been moved from London to the bloc, where Dublin remains the most popular destination for new hubs, followed by Luxembourg, Frankfurt and Paris, EY said.
The EU has said it will only offer selective access for the City of London’s range of financial services under its “equivalence” system, under which access is only allowed if Britain’s finance regulations are equivalent to the EU’s.
“The time has now passed for firms to rely on short term equivalence assessments that would align to EU rules, and the sector’s attention is increasingly focused on the longer-term outlook,” Ali said.
The Tracker monitors statements from 222 of the biggest financial firms that have significant operations in Britain, with latest data up to Sept. 30.